Press Story

New health conditions cost people up to £2,200 on average from annual earnings – others in household also badly affected
Sickness is a key factor in around half of people leaving work
Better health would benefit economic prospects for all, but could boost women’s earnings twice as much as men’s
UK should aim to become the healthiest country in the world within 30 years, says IPPR Commission on Health and Prosperity

The UK’s poor record on health is taking a huge toll on people’s personal finances and job prospects, a landmark report of the IPPR Commission on Health and Prosperity exposes today.

The onset of illness costs people up to £2,200 of their annual earnings, according to an IPPR study of the most recent seven years of panel data from the UK Household Longitudinal Study. The data span five years before the pandemic broke out, and the first two since it began in early 2020. Researchers found that:

Someone with a new physical illness experienced on average a fall of around £1,800 in their annual earnings, before the pandemic.
In the same period, those with a new mental illness faced an average fall in annual earnings of around £2,200.
Since 2020, someone with a new chronic physical illness experienced on average a £1,400 annual earnings fall, while the onset of a mental illness has meant an average annual earnings fall of around £1,700.

They also found that the onset of chronic illness since 2020 has also had an impact on others living in the same household as the newly unwell person, with their annual earnings falling by around £1,200 on average.

The study of the cost of poor health on employment and earnings is among the most ambitious ever undertaken.

It found that loss of earnings following sickness was driven by factors including people leaving their job, working fewer hours, or not returning to work when they might have done so if in better health. These are additional to other costs of sickness, such as paying for healthcare, increased energy usage, or the cost of travel to appointments.

For many, these costs prove life changing. Among those diagnosed with a long-term illness since the pandemic, two in five lost 10 per cent or more of their earnings. Chronic physical conditions are estimated to have driven 700,000 people to leave employment in the same period, forgoing all their earned income.

Job loss was the biggest driver of lost earnings. The report found that poor health was a factor for more than half those who left their jobs (56 per cent) before the pandemic, with a larger impact since. Among older adults, poor health often led to early retirement.

The report also found that people with lower incomes are likely to be worse affected by becoming ill. Following the onset of a chronic illness, around one in six of those already in the lowest income quartile left employment during the pandemic, compared to around one in 20 of those in the highest quartile.

This unequal impact is compounded by the fact that people on low incomes are more likely to experience sickness, and less likely to get the best possible care.

It found that the impact of lost income is also unequal by gender, region and ethnicity in the UK. According to a new analysis applied by IPPR, improvements in people’s health would have different impacts on the earnings of different groups. It found that:

Better health would improve the incomes of all women as a group at twice the rate of men
Levelling-up on health gaps would increase regional earnings most in Wales, the West Midlands and the North East
Workers from Bangladeshi or Pakistani backgrounds would benefit financially the most from better health

Much sickness in the UK is preventable – through better housing, better jobs, action on public health challenges like obesity, or access to the best treatments and social care. Yet UK governments have systematically failed to pull the right levers over the last three decades, the report says.

The IPPR Commission on Health and Prosperity – with commissioners including Lord Ara Darzi, Dame Sally Davies, Mayor Andy Burnham, Sir Oliver Letwin and Dr Halima Begum - challenges the government to do better on raising overall national health, and as a result to reap the wide economic benefits.

It calls for a new Health and Prosperity Act, modelled on the 2008 Climate Change Act. This would hardwire two ambitious new missions in law:

To make the UK the healthiest country in the world within 30 years;
To increase healthy life expectancy to beyond the state retirement age across every region.

Taken together, the report says, these could serve as a health equivalent of ‘net zero’.

As it stands, the UK has both a lower healthy life expectancy and a lower rate of improvement in healthy life expectancy than other high-income countries.

Professor Dame Sally Davies, co-chair of the IPPR Commission on Health and Prosperity, former chief medical officer for England and master of Trinity College Cambridge said:   

“We now know that the UK does worse on health than most other comparable countries – and that this has a tremendous human and economic cost. We also know exactly what policies and innovations could transform health. So it is mystifying why UK politicians, across all parties, have failed to take decisive action. 

“We need a radical increase in our national ambition – equivalent to the Victorian efforts to transform sanitation and clear slums. Why shouldn’t Britain be the healthiest country in the world?” 

Lord Ara Darzi, leading surgeon, former health minister, Paul Hamlyn Chair of Surgery at Imperial College London and co-chair of IPPR’s Commission on Health and Prosperity, said:

”The UK is suffering from more sickness while real incomes are falling. This work sets out the compelling evidence that these are not unrelated trends.

“The report reveals the stark financial damage to those with long-term illness, and the damage to all of our prosperity caused by poor health.

"Policymakers risk being pennywise but pound foolish by focusing too much on the costs of tackling chronic health problems and too little on the economic, social and individual benefits of greater investment in the nation’s health.

"There is much more that could be done with new, early interventions to preempt disease before it damages lives.”

Carsten Jung, senior economist at IPPR, said:

"The idea behind an NHS free at the point of delivery was to stop the cost of illness ruining people's lives. But our analysis shows that the cost of sickness is still huge. It's unfair that sickness is so pervasive and so costly, particularly for those who are lower paid. That's why we're calling for government to make health a central mission for government over the next 30 years."

Carys Roberts, IPPR executive director and a member of the Commission on Health and Prosperity, said:  

“Designed well, missions can work to transform agendas. This has been true of climate change where – while much still needs to be done – the ambition of net-zero has catalysed and coordinated change. 

“That’s why we’re calling for a health mission to be hardwired into law – its own, long-term net zero. This would signal the consistency, long-termism and government commitment needed to coalesce action and partnership between state, businesses, civil society, communities and innovators.”

Chris Thomas, head of IPPR’s Commission on Health and Prosperity, said:

"Our economy faces a series of overlapping crises: low productivity, low growth, widening inequality and an historic fall in living standards. This seminal report from the IPPR Commission on Health and Prosperity shows better health is the best medicine for our economic malaise.” 

ENDS

Carsten Jung (IPPR senior economist) and Chris Thomas (IPPR’s head of the commission), the report’s lead authors, are available for interview

Carys Roberts, IPPR executive director and a member of the IPPR Commission on Health and Prosperity, is also available to discuss its work

CONTACT

David Wastell, Director of News and Communications: 07921 403651 d.wastell@ippr.org

Liam Evans, Senior Digital and Media Officer: 07419 365334 l.evans@ippr.org

NOTES TO EDITORS

The IPPR paper, Healthy people, prosperous lives: The first interim report of the IPPR Commission on Health and Prosperity by Chris Thomas, Carsten Jung, Rachel Statham and Harry Quilter-Pinner, will be published at 0001 on Thursday April 27. It will be at https://www.ippr.org/research/publications/healthy-people-prosperous-lives
Advance copies of the report are available under embargo on request.
Household panel data was taken from the long-standing Understanding Society longitudinal study of 29,000 people, undertaken by the Institute for Social and Economic Research at the University of Essex. The most recent study spans the five years before the Covid-19 pandemic (to the end of 2019) and the first two years since. More information about the study here: https://www.understandingsociety.ac.uk/about/about-the-study
IPPR estimates of the impact of illness on labour market outcomes, including lower earnings, controlled for a wide range of other explanations. All figures are for the working age population unless otherwise stated. Due to data limitations, the research excluded people in self-employment.
The impact on earnings describes the association between poor health (long-term physical conditions and mental illness), and refers to the annual impact on earnings at the end of the study period.
Figures on how better health would benefit different demographic/geographic groups are based on benefit as a percentage of annual earnings.
Making the UK the healthiest country in the world, measured by healthy life expectancy, would require healthy life expectancy to improve by just over three months a year, each year over the next three decades – around the same rate of improvement seen in South Korea between 2000 and 2019. By contrast, the latest government data showed a decrease in UK healthy life expectancy at birth.
The Commission on Health and Prosperity (CHP) is a landmark IPPR initiative, exploring the case that a fairer country is a healthier country, and that a healthier country is a more prosperous country.
Previous reports from IPPR’s Commission on Health and Prosperity include:
Getting Better? Health and the UK labour market – available at:
https://www.ippr.org/research/publications/getting-better-health-and-labour-market
Health and prosperity: Introducing the Commission on Health and Prosperity - available at:
https://www.ippr.org/research/publications/health-and-prosperity
IPPR (Institute for Public Policy Research) is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is Britain’s only national think tank with a truly national presence. www.ippr.org